#StopLossStrategies
1. Static (Fixed) Stop-Loss
• Definition: A predefined price level where a trade is exited to limit loss (e.g., 5% below entry).
• Pros: Simple, easy to implement.
• Cons: Doesn’t adapt to market volatility; can trigger prematurely.
• Best for: New traders, stable market conditions, swing trades.
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2. Trailing Stop-Loss
• Definition: Follows the price as it moves in your favor, locking in profits while allowing room to grow.
• Pros: Protects gains, adapts to market movements.
• Cons: Can get whipsawed in volatile markets.
• Best for: Trend-following strategies, volatile assets, crypto trading.
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3. Volatility-Based Stop-Loss
• Definition: Uses indicators like ATR (Average True Range) to set stop-loss based on asset volatility.
• Pros: More dynamic, reduces chances of premature exits.
• Cons: Requires technical knowledge, can set wider stops.
• Best for: Active traders, algorithmic strategies.
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4. Time-Based Stop-Loss
• Definition: Exit trade after a certain time if it hasn’t hit the target or stop.
• Pros: Useful in intraday strategies, avoids overnight risk.
• Cons: Doesn’t account for market conditions or price action.
• Best for: Day traders, scalpers, earnings plays.
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5. Percentage of Portfolio Stop-Loss
• Definition: Limits loss to a certain % of the total portfolio (e.g., never risk more than 2% per trade).
• Pros: Solid risk control at the portfolio level.
• Cons: May lead to frequent stop-outs if not sized well.
• Best for: Long-term investors, diversified portfolios.
